Tech Startup Versus Tech SME: Who Wins?

Investing in technology products and services offers entrepreneurs a platform for business profit. Interestingly, steering business and software strategies toward the tech industry scales a venture up for huge potential to contribute to economic development. When it comes to typical tech enterprising, a business is either an SME or a startup, categorically.

The World Bank categorizes small and medium enterprises in general as having less than 50 and 300 employee headcount, with total assets and annual revenues of less than $3 and $15 million respectively. Reflecting different quantitative factors, the yardstick according to the European Union for small and medium businesses are headcounts of less than 50 and 250, and turnovers of less than 50 and 10 million.

While strikingly similar in most other ways, tech startups and SMEs dramatically differ in source funding, funding size, as well as collateral. In terms of maneuvering their business and software strategies, all information to succeed in the game can be very overwhelming both for tech startups and SMEs. Talking about the surefire path to tech startup failure, TechStartups blogcites, among others, a bad strategy, a bad business model, the wrong team and lack of funding.

Small and Medium Enterprises: Tech Talk

Providing hands-on assistance to bring programs to scale, Innovations for Poverty Action or IPA, hails SMEs as drivers of economic growth, employment, social mobility and innovation, owing to the way they respond and grab new opportunities that offer business growth potential. SMEs are often the vehicle by which the entrepreneurial-spirited emerging markets and developing economies want to make a mark in a given industry.

From the perspective of technology-oriented SME customers, there is risk that comes with dealing with small entities, but with a reward may just be worth it. In an aim to enhance their competitive advantage, SMEs are more likely to offer personalized customer service at its best, and with the SME founders, most likely providing easy talk for particular negotiations.

In comparison to established tech vendors, early stage tech vendors are most likely to offer services of “lesser sophistication,” but they offer crucial leaps in product or service effectiveness, productivity and cost savings.

Tech Startups: The Inside Story

In collaboration with market research firm YouNoodle, BusinessWeek has recently released its a-list of 50 tech startups which – after being formed no earlier than 2005 in the United States, China, Russia, India and Israel – are making the buzz and gearing up for massive growth.

A highly particular kind of business, tech startups were formed with the specific goal of creating an enormous value for not only for its customers, but also its shareholders and employees.

Tech startups are likely to go head-to-head with the bigger names in the sector, and may remain in the shadows of bigger companies, or risk competing with them. For startups to win the game, Entrepreneur Magazine suggests taking the innovation challenge, and strategically turning large competitors into acquirers. As such, venturing on tech startups amidst an ensemble of potentially bigger business rivals makes a smart business decision.

Tech SMEs and Startups: Strategizing toward Success

Startup and SME success can be elusive, but those who make it are eventually able to hire and train thousands, employ better international business marketing strategies, and then become global successes that inspire others while they create an indelible mark in the industry. It entails the careful implementation of business and software strategies to determine, grab, or even create opportunities for growth, which does not come without a process.

A Reuters blog points out the value of not over-sharing the venture, because “the plans can spread fast.” Consequently, entry-stage tech entrepreneurs may be compelled to compete with established companies prior to creating a solidified head start. As a classic example, small tech ventures are faced with the temptation of announcing that they have pioneered at something.

Without realizing that their product is yet unready for prime, these entrepreneurs can end up struggling to live up to the hype they have created. Getting caught up in the noise that competitors make can be self-damaging for tech small businesses as well. When being more prudent with better-planned business and software strategies and actions, SMEs and startups become better prepared for success.

Reuters also warns about a common, yet often ignored, pitfall when it comes to first-time tech entrepreneurship: marketing a bad product. In maximizing the opportunities for a tech SME or startup, entrepreneurs can leverage on the marketable, or better yet, create a product that clearly stirs the interest of the target market.